Telecom bill before Pa. House increases competition, improve service: As I See It

The legislation helps preserve Pennsylvania’s local phone company network, including safety net services for the state’s most vulnerable consumers.

By
Steven J. Samara

Five years ago, small rural telephone companies throughout Pennsylvania managed to pull off something a massive and costly initiative out of Washington so far has not. In 2008, every one of these companies’ customers could plug into high speed broadband.

The achievement is even more remarkable when you consider that many of the networks used to deploy broadband travel rough terrain to reach those rural customers.

One of the players in the story is a 10-year-old Pennsylvania law which, among other improvements, lightened the regulatory burden for the rural incumbent phone carriers that make up the membership of the Pennsylvania Telephone Association.

Now legislation recently introduced in the state House takes the next step in modernizing the regulatory structure to give consumers even more options when choosing phone, broadband and video services, at more competitive pricing.

At the same time, the legislation helps preserve Pennsylvania’s local phone company network, including the safety net services it provides for the state’s most vulnerable consumers.

The legislation maintains, for a limited time, the Universal Service Fund that guarantees affordable basic dial tone service, especially for low income consumers and those in our most rural areas -- consumers not included in the marketing strategies of many wireless, cable and other phone and broadband providers.

Under the law, the Pennsylvania Public Utility Commission will maintain authority over all vital services including 911 and Lifeline services for low income residents.

The bill also preserves the provisions in a 2004 state law that removed some regulatory obstacles and led to universal broadband deployment by our member companies.

Under the law, the smaller rural companies faced a 2008 deployment deadline while the mid-size carriers, with larger service territories, have until the end of this calendar year to complete deployment.

In addition, the legislation eases more of the regulatory burden for our members so they can better compete with cable, wireless and other providers who enjoy a more favorable regulatory environment. Cable and wireless providers sell products and services where it suits their profit margins at prices that make economic sense.

The current regulatory scheme resembles one that would allow some airlines to serve the most profitable routes, while relegating the costlier ones to others. Not every town of course needs airline service but everyone needs basic phone service, and increasingly, broadband service.

The lopsided business setting is more than gist for debate in Harrisburg. It’s a flawed business model for offering consumers all the options they deserve.

If, for instance, a customer of a cable company approaches an incumbent carrier for a price and service comparison – it happens frequently – our members must seek approval from the PUC if a price adjustment is needed. No law requires the cable company to endure the time and expense required for a review by the PUC.

The 2004 law has helped drive competition, resulting in more consumer options, lower pricing and innovative products.

But in the ten years since its passage, the regulatory scheme has become outdated given advances in technology. It’s time to even the rules for everyone in the telecommunications industry.

The members of the Pennsylvania Telephone Association are the incumbent carriers your parents and grandparents relied on and you can still rely on to offer the latest in telecommunications services. Even in the age of wireless and cable, the network owned and maintained by our members still stands as the backbone of reliability for phone and broadband in Pennsylvania. The current legislation will help ensure it stays that way.

Steven J. Samara is president of the Pennsylvania Telephone Association and can be reached at 717-238-8311, or steve.samara@patel.org.